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The city has agreed to take control of Casa Loma from the Kiwanis Club, ending a prolonged power struggle with the charity that has run the struggling tourist attraction since 1937.

As part of a negotiated takeover agreement that must still be approved by council, the city will pay the Kiwanis Club of Casa Loma $1.45 million for artifacts and trademarks such as the Casa Loma name. That amount is a $500,000 premium over the $950,000 the city already owed for the artifacts under a previous agreement.

The city plans to run the century-old facility for 12 to 18 months before turning it over to a third party, said economic development and culture general manager Mike Williams, who will likely become the new board chair.

The proposed takeover comes less than three years after the city signed a 20-year contract with Kiwanis. Though an advisory committee recommended that the contract be tendered, former mayor David Miller and council supported the no-bid Kiwanis deal. Miller later said he had made a mistake.

Frosty for much of the last decade, the relationship between the city and Kiwanis became especially contentious in 2010. Miller and city staff blamed the club for failing to complete renovations, and Miller unsuccessfully demanded the removal of board chair Richard Wozenilek after his law firm billed Casa Loma tens of thousands in fees.

Williams said suggestions of Kiwanis mismanagement were “probably harsh.” He and Kiwanis president Mark Brogden said the club simply did not have enough money to pay for improvements.

“This agreement with the city wasn’t struck because of the club’s inability to manage the castle,” Brogden said. “We have done that for the last 75 years, and we’ve done it quite profitably both for the club and the city. It’s more a question of the facility needing some extensive capital investment, something the club is not really in a position to do.”

The city’s goal, according to a report released Monday, is to “stabilize” Casa Loma while developing a long-term plan.

Though the former mansion of businessman Sir Henry Pellatt remains one of Toronto’s most popular tourist attractions, it has failed to keep pace with its competitors — Williams said it has “an elevator that looks like it’s about a thousand years old” — and failed to develop compelling reasons for GTA residents to make more than one visit. Visits from American tourists have dropped since the onset of the U.S. recession, and annual attendance has fallen about 5 per cent per year over the last five years to 280,000.

At present, Williams said, Casa Loma is “a single-visit site unless you’re going for a special event like a wedding or something like that. And single-visit sites — it’s a hard time to raise your attendance. You’re not getting more visitors from outside of Canada, so we have to get people that are already here to come more often.”

Wozenilek, board chair since 1991, said the decision to relinquish control was sad and difficult for Kiwanis members. But he called it a “win-win for Kiwanis and the city.”

Councillor Joe Mihevc, a non-voting board member, also praised the deal. He said Casa Loma would best be governed, like other leading cultural institutions, by “people with very serious skill sets,” including experts in tourism promotion, event planning and heritage preservation.

Trelawny Howell, a great-grandniece of Pellatt who has been fiercely critical of Kiwanis, applauded the takeover but said the city should not be paying for the artifacts and trademarks. They never actually belonged to Kiwanis, she said.

Williams acknowledged “differences of opinion” on who owns the Casa Loma name. He said the city decided to pay for it in part because it sought to reach an “amicable” solution; it needed Kiwanis to agree to a contract buyout.